It's a tough climate to launch a major product yet industry observers see major promise in vSphere 4.0.

VMware's vSphere 4 is available now, one month after it was first announced and the same day VMware reported its Q1 results.

The product comprises VMware's strategy to maintain its lead in virtualization and to compete in cloud computing. Releasing a new product in the middle of tough economic times was made all the more
dramatic as VMware continued its aggressive pursuit of R&D and market share instead of resorting to conservative economic management.

"With VMware vSphere 4, we are once again raising the bar significantly for businesses that desire to dramatically improve IT performance," said Raghu Raghuram, vice president and general manager of VMware's (NYSE: VMW) server business unit in a statement.

https://o1.qnsr.com/log/p.gif?;n=203;c=204657336;s=9478;x=7936;f=201808231619130;u=j;z=TIMESTAMP;a=20403940;e=iThe release a month ago was a massive, sometimes surreal party in Palo Alto featuring top
executives from other Valley companies at the company's headquarters.

The hoopla was warranted. Analysts are impressed with the product. "I think that vSphere 4 will help VMware grow its market share -- and performance is the main reason people will consider vSphere over competing platforms," said Galen Schreck, principal analyst at Forrester Research in an e-mail to InternetNews.com.

"This incredible package of features shows just how far ahead of Microsoft and Citrix VMware is in terms of pure hypervisor platform maturity. What's the net impact for customers? VMware can deliver unmatched consolidation ratios and by far the most efficient use of storage and network resources," said Dave Bartoletti, Taneja Group senior analyst and consultant in an e-mail to InternetNews.com.

Of course, the competition is not giving up. "Microsoft, barely out of the gate with virtualization, has had to scramble to explain how their packaging provides equivalent functionality to VMware packages. This is a tough sell, because VMware's features are field-tested and enjoying their second or third upgrade cycle, in many cases, so Microsoft has fallen back on the 'why pay more when you'll get it free in Windows?' approach, which sidesteps the immaturity of their platform," said Bartoletti.

Citrix, too, is talking about the free products it offers but the
company is also touting consumerization and ease of use.

"Both companies are gradually adding features and capabilities that will allow them to better compete with VMware," concluded Jeff Byrne, senior analyst and consultant for Taneja Group in an e-mail to InternetNews.com.

With vSphere, however, VMware isn't just competing with Microsoft and Citrix. As it moves into cloud computing and into the datacenter, the company will meet new competition. In terms of management tools, said Forrester's Schreck, "the question will be can VMware management software compete with the likes of Microsoft, HP, or IBM."

In cloud computing, VMware is a newcomer. "I think the aspect of vSphere
4 that most distinguishes it from competitive offerings is that it has many of the capabilities that will be required in a true 'cloud operating system'. Not everything is there yet, but VMware is clearly on the road toward making cloud computing accessible and cost effective for a large number of business and enterprise users," said Taneja's Byrne.

He added that Google has built a cloud without virtualization, challenging VMware's contention that cloud computing requires virtualization.

"Most hosting and other large service providers are now using virtualization to create scalable cloud infrastructures, but some notable exceptions, such as Google, are not. It will be telling to see how all of this plays out over the next 6 to 12 months," he concluded.

Taneja's Bertoletti agreed that the virtualization wars are moving to the datacenter. "The VMware management stack recognizes that virtualization isn't just for servers anymore; it's the foundation of the entire datacenter from here on out."

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